Software Stocks Get Mixed Ratings

Noting that Salesforce is already selling above a $51 price target, Goldman Sachs analyst Sasa Zorovic downgraded the stock to sell. The firm reported no disclosures regarding Salesforce.

But UBS analyst Heather Bellini raised Salesforce to a buy, lifting her price target to $70, from $55. "In addition to being the leader in the fast growing software as a service space, Salesforce.com has done an excellent job at preparing itself for the next chapter in its life" with its platform-centered strategy, she wrote. Spending on hosted subscription software should hold up better than large-ticket software purchases, she added. UBS makes a market in shares of Salesforce.

New issue NetSuite(N Quote), which, like Salesforce, is a pure play on hosted software, was down $4.08, or 13%, to $27.61.

"A slowing U.S. economy may spread overseas removing a key tailwind for the group," Goldman Sachs analyst Sarah Friar wrote.

Friar reiterated her view that in a tough macro environment, Oracle(ORCL Quote) is her top defensive buy in the sector, while Microsoft(MSFT Quote), also a buy, will benefit from major upgrades to server software this year. Oracle was up 35 cents, or 1.6%, to $22.38. Microsoft was up 25 cents, or 0.7%, to $34.63.

Goldman Sachs also raised price targets on sector companies Autodesk(ADSK Quote), BMC Software(BMC Quote) and Informatica(INFA Quote).

Computer-aided design software developer Autodesk is doing well as the engineering profession switches to three-dimensional design. Zorovic projects 15% annual revenue growth for Autodesk over the next five years, while it expands operating margins. In addition, business software maker BMC, benefitting from vendor consolidation, is showing market share gain, according to Bingham.

Autodesk was up 89 cents, or 2%, to $46.59. BMC rose 42 cents, or 1.3%, to $34.10, while Informatica was down 13 cents, or 0.8%, to $16.98.

Meanwhile, Goldman Sachs lowered its price target on Macrovision(MVSN Quote) from $27 to $22. It was trading up 26 cents, or 1.5%, to $17.26. Goldman Sachs makes a market in Macrovision. Microsoft, Autodesk, BMC and Informatica are investment banking clients of the firm.